Pulse Market Insight #256

A Roller Coaster Growing Season

What a difference a few months makes! Before the growing season got started, most of the prairies were under some sort of drought conditions with areas of severe or extreme drought in all three provinces. Then, some late snow and early rain in late March and April started to whittle away at drought areas. Things really got more active with widespread rains in May and June, which delayed planting for many farmers. Despite all that rain, a few areas were still on the dry side and those are now becoming more noticeable due to mid-July heat. Temperatures in the 30s aren’t all that unusual but are starting to have an effect.

The shift from too dry to too wet to too hot has created several crop scenarios. Those crops that got planted early and received regular rains are looking excellent, with some people talking about record yields. Crops in areas where planting was delayed are struggling to catch up and will need an open fall. Some locations got far too much rain and pulse crops there have been hit hard by flooding and disease. Meanwhile, parts of the prairies that didn’t catch as much of the June or July rains are running out of moisture and the heat has hit at a critical point of development.

Now that StatsCan has given us a reasonably reliable acreage estimate, the market outlook is now focused on yields. Specifically, how much yield potential was available and how much has been lost due to the flooding and the more recent heat. Pulses are typically better at handling dry conditions but the heat during flowering could be negative.

The crop reports from Alberta and Sask Ag are instructive but limited. For example, ratings for peas in both provinces have been quite positive and actually turned higher in early July, in contrast to the normal tendency for ratings to decline through the growing season. The corresponding chart for lentils shows a similar situation. These ratings suggest very strong yield potential, at least there was in early July.

The problem is that these reports are looking back one or two weeks and don’t reflect the latest situation. And if yield has been reduced during the flowering stage, the visual crop ratings may not capture those losses. Of course, there’s also the other risk of overreacting to the latest heat and lowering yield estimates too far.

Our “gut feeling” based on watching previous years of crop development is that 2024 yields will still be above average for western Canada, as the good areas outweigh the bad ones. These yields, together with increased 2024 pulse acreage, will mean a large bounce back in Canadian production. In the last few years, we’ve seen that the crop in Canada isn’t the be-all-and-end-all when it comes to global pulse markets, but it will still have a large impact. If so, prices could struggle to show meaningful gains after they come out of the harvest lows.